Radu, Prince of Hohenzollern v Houston & Anor

Where an application combines security for costs with a proposed condition on permission to appeal, the court should treat those as separate elements. If the conditions application is abandoned, the ordinary costs consequence is that the applicant bears its costs. The court may consider settlement correspondence and offers when deciding costs, but it is not engaged in a negotiating game. A hearing that might have been avoided does not necessarily justify awarding all of its costs, particularly where the offer made at the hearing differs materially from an earlier offer. Separate costs orders may be made for the security and conditions applications.

The claimant brought libel proceedings against the editor and publisher of Royalty Monthly. The defendants obtained an order requiring security for costs, and final judgment was entered after the security was not provided in time. The claimant later obtained permission to appeal against that order.

In the Court of Appeal, the defendants sought £100,000 security for the appeal, a further £350,000 as a condition of permission to appeal, and the costs of the application. The security issue was agreed after the claimant arranged funding. At the hearing, the defendants no longer pursued the conditions application. The central issue was how the costs of the two applications and the hearing should be allocated.

1. Disposition. Permission was given for £100,000 to be paid into court as security for costs. The conditions application was not pursued.
2. Separate applications. The security application and the conditions application were separate elements. Since the conditions application had been abandoned, the normal costs consequence was that the defendants, who had made that application, paid the claimant’s costs of it, subject to detailed assessment if not agreed.
3. Security costs. The claimant was ordered to pay the costs of the security application, also subject to assessment if not agreed.
4. Offers and hearing costs. The court could consider correspondence and the possibility that the hearing might have been avoided. However, the offer made at the hearing was not entirely the same in substance as the earlier offer. The appropriate order was therefore for the defendants to pay half, rather than all, of the claimant’s costs of the hearing. No payment on account was ordered.
5. Final order. Security of costs was granted, with the stated costs directions.

• Court of Appeal (Civil Division). Carnwath LJ determined the application for security and conditions and made the costs orders recorded above.
• Queen’s Bench Division. Eady J gave judgment on 7 March 2006, holding that the Master had erred in certain respects and that the appropriate security would have been £80,000, but left the final order standing because the time for payment had expired and the challenge to the refusal of an extension was not pursued.
• Court of Appeal (Civil Division). Laws LJ granted permission to appeal on 21 April 2006 and stayed detailed assessment of costs.